HSBC yesterday reported a better than expected 32 percent rise in pretax net profit for the third quarter, thanks to reduced costs from fines and settlements with regulators as heavy spending on compliance by Europe’s biggest bank begins to take effect.

    HSBC said costs from regulatory punishments fell US$1.4 billion from the third quarter of last year, showing progress on reforming its conduct at a time when the British Government is keen to move on from the financial crisis to a more accommodative stance toward the industry.

    Recent quarterly earnings reports for the bank have been marred by provisions for regulatory investigations, including allegations that HSBC and other banks rigged foreign exchange markets worldwide and that HSBC helped Swiss clients evade taxes.

    HSBC said in a filing to the Hong Kong stock exchange yesterday its total spending on regulatory programs and compliance rose to US$2.2 billion in the first nine months of the year, up 33 percent from the same period last year. (SD-Agencies)